Susquehanna County Blog

On Friday 4/25, Thomas Murphy from Penn State returned the call to the reader who called him to inquire about using material other than water and sand in the fracing process.  Also, the question was asked about being aware of the Congressional Oversight Committee hearings on using diesel fuel and other chemicals in that process.  Mr. Murphy indicatd that he was somewhat familiar with the hearings, however he believed that only sand and water were to be used in Pennsylvania.  He referred the reader to a person from DEP regarding water quality issues.  The reader will make that phone call on Monday.

There was a short discussion about having a baseline test done on one’s well.  Generally, it was agreed that if the homeowner took the test him/herself, it could have little value in court if push came to shove.  The issue here is the “chain of custody” of the sample.  In other words, who could prove the homeowner took the sample from their own well instead of somewhere else?  Knowing that, the reader, and several others had a baseline independent water test taken.  The test included voc’s (volatile organic compounds) as well as many other pertinent items.  If anyone is interested, a complete list of the tests can be listed here.  Again, the important thing is to have the test conducted by an independent company not the homeowner. 

Now the next question is, when should it be retested?  That is a question for DEP.  As noted above, the reader will be contacting their water quality person shortly.  That question will be included.  The response will be shared here.  I suspect the answer will be somewhat complex. 

First, this writer would like to thank Thompson for the research he (or she) has done.  Please read Gas Muse 4/18/2008 (below) for the latest (and most disturbing to date) comments and supporting links. 

If you haven’t been keeping up, you should know this: there are way more questions that any of the “experts” either have answers for or are willing to share.  Unless you have ALL the information, you should NOT sign a lease.  Of course what you do with your property is your business.  Friends, below are  a couple of links to provide even more information for you.  The first is from the NRDC. It suggests that a certain huge company, Halliburton, is doing their part to destroy the Rockies in their quest for natural gas.

http://www.nrdc.org/OnEarth/06sum/rockies1.asp#

The second one really takes the cake.  How about injecting liquid waste into the ground as a method of “storage”.  Review your lease to see if they can “store” material on your property.

 http://www.fwweekly.com/content.asp?article=6498

If you don’t vote, don’t complain.

Town Hall Meeting 7 - 9pm 4/21/2008

Representatives from PA DEP Bureau of Oil and Gas Management will do a presentation on regulatory procedures and permits for natural gas drilling. 

Penn State Natural Gas Leasing Educational Representative Tom Murphy will also be on hand to speak about natural gas leasing.

Lakeland High School is located on PA 247, about 3 miles South of PA 106 (Finch Hill).

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If anyone goes to this meeting, please post whatever information you can add to this site.  Thank you.

 If you are so fortunate as to be able to ask a question of Mr. Murphy (who was at the Tunkhannock meeting), please inquire as to why there was a Congressional Oversight hearing last October on dangerous chemicals being used in the fracking fluid - and what DEP is doing to protect our water supply.

In the Tunkhannock meeting, Mr. Murphy appeared to not know about using anything but water and sand.  This is probably not the case, if he read anything about the Oversight Committee, which I suspect in his line of work would have been virtually impossible to miss.

If you refer to the “Gas Lease Seminar 4/16/2008″ post, you will see that one of our readers, Thompson, took the time to go to the meeting and post some valuable information.  For that, this writer as well as all readers of this blog (except the landmen) thank you. 

I do have one serious concern with the presentation.  In the third post by Thompson, he  reports that a Mr. Murphy answered a question about using chemicals in the fracking process:

“There was a question about the chemicals in the fracking water. He thought that those stories related to oil wells, that gas wells used water. He said that the water was recaptured from the well and returned to the tankers where it must be taken to a water treatment plant before it can be released or discarded.”

I direct your attention to the following two links, one from Congressman Henry Waxman (D) CA, Chairman, House Oversight Committee, Hearings from October, 2007,  regarding using chemicals in the fracking process; and the the other from the Oil and Gas Accountability Project.

http://oversight.house.gov/story.asp?ID=1638

and

http://www.earthworksaction.org/oil_and_gas.cfm

The second site was a direct referral from the Congressional Oversight office during a phone call yesterday.  While the individual I spoke with told me that they do NOT dispense legal advice, he suggested both sites above.  He did stress that there is competent legal advice out there, generally it follows the “Play” as there are usually problems with the way these companies do business.  He also agreed with the statement that if a well is being drilled anywhere near (of course “near” is a bit ambiguous) your well, it would be a good plan to have a complete - probably way more than the Penn State version - baseline test of your well.  This way, if anything changes, you will have documentation to persue the appropriate remedies.  I don’t know about you, but near could be within one mile.

If in fact it can be determined that diesel fuel and other carcinogens are being used, this is a cause for great concern.  Personally, while I am not following the “Chicken Little” plan, I am going to have a complete, and I do mean complete test of my water done by an Independent Source. 

As we have been told for years, once something gets into our underground aquifer, it can travel for miles.  Whether or not it is correct this fluid is recovered, and reused is of little comfort.  There is no way, even if it is attempted, that all of it can be recovered.  I remember reading recently that 8 ounces of gasoline can contaminate almost 500,000 gallons of water.  If you have a fuel spill, DEP will be all over you like a carpet.  If using chemicals in the fracking process is as the Oversight Committee investigated, what is DEP doing to assure we have clean, non carcinogenic water?  

The bottom line is this: if the United States Congress has spent the time to investigate this matter in other parts of the country, shouldn’t we be paying attention here?  By the way, the hearings have concluded, however, the investigation, according to the person from the Oversight Committee I spoke with is still very much open. 

One more site to view.  This is a little older, but it is more disturbing.

http://www.salon.com/news/feature/2006/05/05/fracking/index.html

Pleasant dreams?

After reviewing the entries, replies and links regarding gas wells on this blog and others, it’s time to push all the commonwealth’s elected representatives to update and enforce the laws regarding gas and oil exploration, leasing and drilling.

It is becoming more obvious on a daily basis that our county commissioners (all three) are completly ineffective at even informing the residents of Our Fair County that there could be a serious problem if the landowners of even 1 acre sign a lease without considering the wording (read potential downside).

That being said, we really need to make our elected officials - State and Federal aware of the potential issues regarding leases, wells, and other related issues.  In case you didn’t read the articles from the River Reporter, please go to Gas Muse 4/15/2008. 

Also, here is another site from Damascus, PA, which may be of interest

http://naturalgaslease.pbwiki.com/Damascus%20Citizens

 The point here is that if our county officials are not able or interested in doing what needs to be done to protect the landowners, especially the ones with smaller lots surrounded by larger lots, and the water issue, then it’s time to move up the ladder.  We need to contact our state representatives and senators as well as our federal congressmen and senators, the news media and anyone else who could make a difference.  If the websites posted on this blog in the past few days don’t give you great concern, I don’t know why.  It has been said before on this and other sites, so please bear with me if you have heard this before. 

At the end of the day, the greatest natural resource we have in Northeastern, PA is our clean, abundant water.  Don’t let someone who has NO interest in this area and who doesn’t live here cause problems with our water. 

Your thoughts?

READ THE COMMENTS OF A READER WHO ATTENDED THIS SEMINAR - SEE REPLIES BELOW 

Natural Gas Lease Exhibit & Seminar
Wed April 16, 2008
Interaction with General Public 5:00 PM to 7:00 PM
Understanding and Negotiating a Gas Lease 7:00 PM to 9:30 PM
Tunkhannock Area High School
120 West Tioga St
Tunkhannock, PA 18657
Open to the Public
Contact Penn State College of Agricultural Sciences 570-836-3196

These days almost everyone is looking at is the “bonus money” when they negotiate a lease.  “How much did you get?” has become a common point for discussion. To most people, the other terms of the lease go out the window when an amount offered for a lease per acre exceeds what many people remember the fee simple value of real estate was a few years ago.

It isn’t about getting a few dollars to sign a lease, heavily worded to favor the gas company, it’s what the terms of the lease are and what comes next.  In the bigger picture, getting a ”bonus money” check, may not be all it is cracked up to be.  Read on.

Having spoken with several in the real estate community, the following was the general consensus.  If you intend to sell your land during the time of this lease, be prepared to wait longer than a property which was not leased.  Why?  The buyers who are still looking are making it very clear that they want nothing to do with these leases.  Who are the buyers?  Since the subprime mortgage problem has hit, it seems that the ones who need that type of financing are no longer around.  Or if they are, they are few and far between.  Credit scores, according to different mortgage brokers need to be higher.  Nothing down is out, 5% down is rare. 

So, who are the buyers?  For the most part, not the locals, unless they are investors.  The current buyers are ones who are generally not from this area and are paying cash.  One realty agent shared the story of a buyer who called inquiring about larger parcels of available land - 50 through 500 acres for sale in the county.  He stated he was a cash buyer. would close quickly and that he wanted to buy it to lease it then dump it on the market through the realty company, of course retaining the “bonus money”.  It was stated that while this is not the norm, it is not entirely unusual either.  Nice.  All we are thought of  to these bottom feeders is as a place to buy up our cheap (relatively speaking) land, grab what money is there from a lease dump it and walk away.  If you have a problem with people coming here who don’t share the locals’ values - such as they are (quarries and lots of junk around notwithstanding), then you will really love this latest crop.  They don’t want to live here, they only want to grab what they can and stay away from this Godforsaken patch we call home.  Thus, it becomes an economic decision to them.  They don’t have to live here, they won’t be inconvenienced by the construction or any of it afterwards.  Just make a quick buck and get out.  Again, this isn’t the majority of the buyers, but a significant disturbing minority.   Other buyers are ones who just want to buy property and be left alone.  They don’t need the “bonus money” and they don’t need the hassle. 

After the leases are signed, who is going to purchase your property?  No really, think about it.  Why would someone who truly wants to live here, want to be saddled with the uncertainty of what could happen on or around their property?  One of the great advantages to living here is the lack of disturbance of the land.  It certainly was a significant motivating factor  for the many of the neighbors I know who have chosen to locate here. 

Here is a prediction.  In the short term and possibly mid term, the value of a property with a signed lease may have been reduced by a similar amount of the “bonus money”.  Sure these landmen will tell you that you can sell your property with a lease.  Legally, this is correct.  In the real world however, buyers for a property with a lease which obligates the owner to allow these companies to do many things to and on the property that will shatter their peace and quiet, are few and far between.

If you don’t intend to sell in the near future, then this may not be a problem.  However many of us who live here, don’t know what catastrophe (death, divorce, having to bail out of the area), may befall us and when.  Will we be able to sell our land if we have a lease?  The real answer to that question may take years to realize.

This writer was just made aware of  an article in this week’s River Reporter from Narrowsburg, NY.  The link is here:

http://www.riverreporter.com/issues/08-04-10/head1-drilling.html

As well as another on water concerns:

http://www.riverreporter.com/issues/08-03-06/head3-gas.html

Using diesel fuel to aid in the fracing process?  I hope someone is paying attention…

To find more stories there, go to the archives section on the left side of the riverreporter page.

Your thoughts?

It occurred to this writer after reading a comment from a contributor to this blog that the actual numbers of both the investment and the obvious internal projections of profit from this “Play” are nothing short of enormous.   Using Susquehanna County as the example, follow this: We have about 823 square miles of land here.  There are 640 acres in a square mile.  This means there are roughly 526,720 acres of land here.  If, at the end of the day, assuming a good class action doesn’t negate these leases (due to illegality of contracts, blockbusting techniques, etc.); at the current rate, these gas companies will probably have about $1,000 per acre invested. 

Of course, there areas which can’t or won’t be leased, such as under boroughs and villages, but that is a relatively small area.  Even some of those communities are considering leasing their excess land.  So, for the sake of discussion, let’s assume that the total investment to lease gas (and oil) (and in more than a few cases - mineral) rights here in Susquehanna County is in the neighborhood of $562,720,000.  That is NOTHING to these companies which expect to make many multiples of their investment.  If you haven’t read it here or seen it elsewhere, you should know that very recently, leases were signed in the Arlington, Texas area for $22,000 per acre, plus 25%. 

Reading elsewhere, it will cost in the neighborhood of $1 to 3 million to drill a well.  Before you start feeling bad, remember, they won’t have that investment until they actually drill and connect the well to the to be installed piping through a lot of backyards.  Once that is is place, just remember, they keep as much as 87.5% of the value of the gas flowing from that well.  So, the ultimate value of the wells to be drilled in Our Fair County to these companies could easily be in the tens of billions of dollars. 

If you have a problem with the last statement, consider this: it has been conservatively estimated that the Marcellus Shale contains one quarter of the known reserves in the contintental US.  These companies would not be as interested in this area as they are if they didn’t stand to make a whole lot of money.

The more information that comes to the surface, the more this writer is convinced that the leases signed should and must be challenged.  Not for the amount of “bonus money” or percentage of royalty unless it doesn’t meet the Commonwealth’s minimum requirements, rather for the way the “landmen” used improper and probably illegal tactics (read BLOCKBUSTING TACTICTS) to get (uneducated as to their rights).  Again, based on the previously posted links, the “landmen” who negotiated and executed these contracts are almost certainly operating well outside the law. In other states, this may not be the case, but reading the statute, it is abundantly clear that they are here.  The easy answer is to REFUSE to negotiate with them. 

Believe me, these companies want the access to this huge pool of gas (and the oil) which lies below.  It’s time to fix the problem before it becomes unfixable.  Oh yes, it has been stated by several who apparently know, the “Great Saviour”, our minority commissioner is asking a ridiculous fee to represent these injured landowners in a class action.  Don’t make a SECOND mistake.  Tell him to do his job as a commissioner.  After all, we are paying him (and two other commissioners) to represent ALL of us.

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Another short meeting.  Probably the only things of note are two appointments. 

Jennifer Morelli from Soil Conservation was appointed to replace Eric Hamby as the Recycling Coordinator.

Joseph Franks was appointed to the County Railroad Authority.  Is this a case of another good citizen being appointed to an organization which enjoys NO support from the commissioners and has NO funds to operate?  The Commonwealth can support the existing (almost dead) New Milford project to the end, however, without a county guarantee, nothing will happen.  What a shame.  What a waste of the volunteer members’ time.

Question: Would it be a conflict of interest for Michael Giangrieco, Esq. (R) who is an elected county commissioner, to attempt to organize landowners regarding gas leases for a potential class action lawsuit as a portion of his private practice, when as a commissioner, no obvious attempt at action to protect the citizens of Susquehanna County has occurred?

Your thoughts, please.